The difference between revenue and economic profit. What is the difference between revenue and profit? Determination of profit, types

If you're an active investor researching a company on your own, you might find yourself wondering about its earnings, earnings, and revenue. But are they synonymous? Can revenue be greater than income? Why can't all expenses be considered expenses? Is it possible to legally reduce profits and why do it? You will find answers to all these questions in this article.

Revenue and income

Income represents the receipt of assets or a reduction in accounts payable, leading to an increase in capital. The exception is contributions from owners.

According to PBU 9/99 “Income of the organization”, two large groups of income can be distinguished:

• Income from the main activity (revenue);
• Other income.

Definition of the concept of “revenue” in legislative acts absent. But PBU 9/99 provides examples of receipts that are revenue for various organizations. Based on this list, the following definition can be given.

Revenue is the total amount of claims made to customers for sold products(or services provided). At the same time, the sale of these products should be the main activity of the company.

Example. Consider the activities of a retail grocery store.

Revenue is income from the sale of food products.

Receipts that are not revenue:

• from renting out vacant retail space;
• for the sale of unused warehouse and retail equipment;
• interest on loans issued to third parties;
• fines from suppliers for violation of contract terms.

Summarize. Income is a broader concept. In addition to revenue, it includes other income. This means that income will always be greater than or equal to revenue.

Profit

If revenue and income reflect the receipt of funds (or a decrease in debt), then profit shows the financial result of the company. In a simplified form, its calculation looks like this:

Profit = Income – Expenses

But in practice everything is somewhat more complicated.

Why not all expenses can be recognized as expenses

According to Russian laws, all companies are required to pay income tax: when common system Its tax rate is 20%. Naturally, few people want to give the state a fifth of their profits - and here the business owner is tempted to write off the maximum possible amount as expenses. For example, write yourself a large monetary reward.

To prevent such abuses from occurring, the tax code clearly defines what can be classified as expenses. In the example with remuneration, it can be classified as an expense only if the possibility of its accrual is specified in employment contract, regulations on bonuses or in other local regulations. Otherwise, you will also have to pay tax on this amount.

General requirements expenses are given in Art. 252 of the Tax Code of the Russian Federation. There are two of them:

1. Expenses must be justified, i.e. all expenses must be economically justified. Of course, a business owner can spend money the way he wants, but the tax authorities will not accept such expenses as deductions, and tax will be charged on them.
2. Expenses must be documented, and their price must correspond to the market price. For example, if a company paid 300 thousand rubles for renovation of a premises, and the average price of such repairs is 100 thousand, then the tax office may have questions.

What cannot be considered expenses

Article 270 of the Tax Code of the Russian Federation provides a list of expenses that are not taken into account when calculating taxable profit. It does not prohibit these expenses. However, they will not affect the amount of tax. Such expenses include, for example:

• Dividends paid to shareholders.
• Fines transferred to the budget.
• Purchasing shares of other companies.
• Free transfer of property.
• Expenses for the creation or acquisition of property subject to depreciation.
• Contributions to public organizations and trade unions.
• Financial assistance and other employee benefits not provided for in employment contracts.

How to legally reduce profits

It would seem that the legislation clearly defines the procedure for recognizing income and expenses. However, there is still room for maneuver and tax optimization can help the company save significant amounts. Here is just one example of legal optimization.

The organization decides to reconstruct the production building. To do this, an agreement is concluded with a third-party company for reconstruction. As a result of the work performed, an object is obtained. Accordingly, expenses cannot be written off in the current period, since the cost of fixed assets is written off by calculating depreciation. It turns out that the organization spent a lot of money, but on paper it still remained profitable, since the write-off of these costs will take many years.

An organization can enter into two agreements with a contractor:

1. For reconstruction. This will include creating a project, dismantling walls and ceilings, construction works, redevelopment, etc.
2. For repairs. This contract includes painting walls, replacing floors, plumbing, windows, installing equipment, etc.

Nothing can be done about the reconstruction: these costs will have to be written off through depreciation. But the organization will be able to take into account repair costs immediately after they are made. This will allow you to reduce income tax in the current period and keep the saved money in circulation (which actually means receiving an interest-free loan from the state).

But you can't do that

The example from the previous chapter does not violate any law of the Russian Federation and is completely legal. For clarity, let us give an example of an illegal reduction of taxable profit.

A manufacturing organization creates its subsidiary in an offshore zone with a zero income tax rate. All manufactured products are sold at cost to their subsidiary. That, in turn, is engaged in sales to the end consumer. As a result, a company located in the Russian Federation, according to documents, barely makes ends meet, and a small offshore office makes a huge profit.

Naturally, this method is illegal. Yes, the company has every right to sell its products to anyone, but tax authorities will very quickly become interested in pricing methods. If the selling price turns out to be significantly lower than the market price, and even if a connection between these two companies is revealed, the organizer of such a scheme will face serious trouble. But it’s no secret that in Russian realities, connections at the top play a big role.

Example of calculation of indicators

Let us consider as an example the reporting of the Magnitogorsk Iron and Steel Works (MMK). The screenshot shows a fragment of his reporting for the first quarter of 2019. Negative values ​​are indicated in parentheses.

Revenue – $1836 million.

Revenue – $1844 million . This included:

• revenue – $1836 million.
• other operating income – $3 million.
• financial income – $5 million.

Expenses – $1564 million . These include:

• Cost – $1321 million.
• General and administrative expenses – $51 million.
• Commercial expenses – $141 million.
• Change in expected credit losses – $6 million.
• Financial expenses – $7 million.
• Impairment losses and provision for land reclamation – $2 million.
• Foreign exchange expense – $14 million.
• Other expenses – $22 million.

Taxable profit - $280 million ($1844 million - $1564 million)

Income tax was assessed on this taxable income, which amounted to $55 million.

Profit for the period amounted to $225 million.

Let's sum it up

Revenue- These are revenues from the main activity of the company.

Income- This total amount revenues. Thus, income is a broader concept. It may be equal to or greater than revenue.

By receipts in these definitions we mean not only the receipt Money, but also the emergence of accounts receivable or a reduction in accounts payable.

Profit is the difference between income and expenses for a certain period. It shows the results of a business and can be either positive or negative (loss).

For a novice investor, it is important not to confuse revenue and profit: the former may well be much larger. In our example, revenue exceeds profit by more than 8 times.

Profit is one of the main indicators of a company's performance. The receipt or absence of profit characterizes the company's activities as successful or unprofitable. The more profit, the better. This means that the enterprise works well, covers costs and, moreover, the entrepreneur who has made a profit can manage “free” money: direct it to the further development of the company or spend it on personal needs.

To determine profit, you need to know and be able to find related indicators such as costs (otherwise expenses or expenses) and revenue (income) of the company. People often don't see the difference between profit and revenue. In addition, profit is divided into types: balance sheet, net, taxable and others. In our article we will understand the intricacies of this most important indicator for every businessman.

Before explaining what Profit is, we need to distinguish between two concepts: revenue and profit.

Article 249 of the Tax Code of the Russian Federation and the comments to it indicate that - these are proceeds from the sale (sale or other alienation of paid goods) of goods, services, property and property rights, both own and purchased for resale.

Individual entrepreneur(IP) Ivanov purchased a batch on the AliExpress website mobile phones Xiaomi in the amount of 10 pieces, at a price of 12 thousand rubles for 1 phone. Within a month, he sold the phones at a price of 20 thousand rubles apiece. REVENUE amounted to: 10 * 20,000 = 200,000 rubles. That is, revenue is income received from sales and does not take into account expenses.

The entrepreneur spent 10 * 12,000 = 120,000 rubles on purchasing phones. These are the COSTS that represent .

Now let’s subtract the costs from the revenue: 200,000 – 120,000 = 80,000 rubles - this is the PROFIT received by Ivanov from the operation of purchasing and selling phones.

This example “on the fingers” helps to understand how profit is found. But there are nuances. Profit is classified into different types and depends on the categories of costs, tax burden, and other factors. This will be discussed further.

The concept of “profit” is characteristic of entrepreneurial activity. This indicator is used in the Civil Code of the Russian Federation; due to it, in Article 50 of the Civil Code of the Russian Federation, legal entities are divided into commercial and non-profit organizations.

Profit appears in federal laws on the activities of production cooperatives, business societies, and other business entities, is mentioned in the laws on the federal budget.

More precisely, this concept is disclosed in the Tax Code of the Russian Federation. Article 247 of the Tax Code of the Russian Federation states that profit received as a result of the activities of the taxpayer is subject to the levy of income tax. Profit is recognized as income received, which is reduced by the amount of expenses incurred. What relates to expenses is defined in Articles 252-255 of the Tax Code of the Russian Federation, and is described in detail below.

Let us clarify: the company’s expenses that generate profit and are recognized for tax purposes must satisfy 3 principles:

1. Be directly related to commercial activities. For example, the Orion company purchased computers for accounting for 150 thousand rubles. This amount is fairly included in the firm's expenses. But 10 thousand rubles spent on an aquarium with fish in the same accounting department cannot be attributed to expenses aimed at implementing commercial activities.

1. The expediency of expenses from an economic point of view is necessary. So, if the accounting department of Orion LLC employs 3 full-time accountants, then purchasing 5 computers will be an unjustified waste of financial resources.

1. Documented proof of expenses is required. If the same LLC has lost the invoice for the purchase of 1 of 3 computers, and it is impossible to confirm the purchase, then the expenses for such technical equipment will not be recognized in order to reduce the tax base.

What are the types of profit?

Two main approaches to determining profit are used, they find:

• accounting profit
• economic profit.

What is accounting profit

This type is based on the actual accounting data of the company. Accounting profit is the difference between a business's income and expenses for a specific period of time. Here the accounting (explicit, or, in other words, external) expenses of the company are taken into account.

• Accounting profit = Revenue – accounting (explicit) expenses

Such expenses include:

• salary of the company's personnel;
• funds spent on equipment, buildings, structures, machines;
• depreciation of fixed assets;
• payment of transportation costs;
• payment costs utilities, electricity;
• payments to suppliers of raw materials and other material services;
• payment for intermediary, insurance, banking services.

The difference from accounting is that costs additionally include alternative (implicit, or internal) costs. These are the costs at which, presumably, the company could make a greater profit from its own resources.

When calculating this type of profit, those lost costs are taken into account, which, with a more rational use of the company's resources, would bring additional benefits.

Find economic profit using the following formula:

• Economic profit = Revenue – (External + Internal costs)

You can calculate in another way:

• Economic profit = Accounting profit – internal (implicit) costs

Here's an example:

Businessman Petrov took out a loan from a bank and opened a production workshop for the manufacture of furniture for cutting. The premises belong to the entrepreneur as a property owner. Explicit costs include: wages for the designer and two workers, depreciation of the computer and 2 sawing machines, monthly utilities, interest on the loan and purchase of materials. For a month, these expenses amount to 200 thousand rubles. On average, Petrov receives orders worth 300 thousand rubles every month.

Let's find the profit indicators:

Accounting profit will be equal to: 300,000 – 200,000 = 100,000 rubles.

If Petrov rented out the workshop premises, it would bring 40 thousand rubles a month. Working at a factory in his main specialty - a foreman for setting up machine tools - he could receive 25 thousand rubles a month. These are implicit benefits, or internal costs.

Thus, the economic profit is: 300,000 – (200,000 + 40,000 + 25,000) = 35,000 thousand rubles.

From the example it is obvious that accounting profit in this case is greater than economic profit. This suggests that entrepreneurial activity Petrov’s IP brings more benefits and advantages than the absence of one.

If we assume that the prices for renting out workshop premises have increased from 40 to 80 thousand rubles per month, and Petrov received an offer from his previous job to become a foreman for equipment adjustment with an income of 50 thousand rubles, then the economic profit will be: 300,000 - (200 + 80 + 50) = – 30,000 thousand rubles.

A negative indicator reflects the inexpediency of the business; in this case, Petrov would have to rent out the premises and go to work as a foreman at the plant.

If there is a negative economic profit, options for reprofiling or closing one’s own business are considered.

The analysis of accounting and economic profit is complemented by a closely related indicator called “normal profit”. This type of profit is used in investment activities to evaluate the effectiveness of investments in a specific business.

Normal profit

Normal profit is said to appear when economic profit equals zero. This equilibrium is achieved when the company's total revenue equals its total costs.

In the example with IP Petrov, normal profit will be received when the number of orders is worth 265 thousand rubles, while the amount of economic profit is zero, and the company’s expenses fully correspond to income. Everything that Petrov earned above this level, which is 300 thousand - 265 thousand = 35 thousand rubles, is “excess profit”.

An excess over the level of normal profit reflects the positive dynamics of the enterprise's development. A value below the normal profit level characterizes the profit as negative and the company’s activities as unprofitable.

What does this mean for an investor? The most direct. Achieving a level of normal profit characterizes the business as attractive enough for investment.

If the profit exceeds the normal indicator, then investing in it makes sense and is beneficial for the investor.

If the profit is less than normal, the investor loses income and may decide to withdraw funds from the business and redirect it elsewhere.

Video: Economic and accounting profit

Additional classification of the organization's profit

There is another gradation based on the inclusion of various income and expenses of the company in the calculation. Let's look at this classification in more detail:

Gross profit

It is an indicator of the return on production or the sale of goods or the provision of services and is directly related to the costs of such operations. In this case, management and marketing expenses, advertising, and product sales (commercial expenses) are not taken into account. That is, gross profit reflects income arising from the turnover of goods or the production cycle of the enterprise’s products. It is most often used by enterprise management when planning upcoming revenues and costs. Production costs are not constant, they can change, so estimates are drawn up for a short period, for example, a financial year.

Gross profit is calculated based on the financial results obtained by the enterprise and reflected in financial statements, namely in the “Profit and Loss Statement”.

It is determined by the following formula:

• Gross profit = Revenue – Cost

Revenue does not include other income, for example:

• sale of fixed assets: equipment, buildings, structures;
• from the sale of securities;
• gratuitous receipt of property as a result of donation;
• fines or penalties paid by counterparties for violations of contractual obligations.

There are exceptions when, for example, the sale of equipment is enshrined in the accounting policy as one of the main activities; in this case, such transactions will be included in the calculation of gross profit.

The cost price is also found only based on production costs, or those aimed at selling goods or providing services.

So, in production organization To calculate gross profit, the following costs are included in the cost:

• for raw materials, inventories, working tools;
• fuel and energy costs;
• for depreciation and maintenance of machines and equipment;
• for the salaries of key personnel, taking into account the required contributions to the funds: pension, medical and social insurance.

In a trading company, the cost consists of the following expense items:

• for the purchase of goods for subsequent resale;
• for employee salaries, with contributions to the Pension Fund, Social Insurance Fund, and Compulsory Medical Insurance Fund;
• rental payments for renting retail space, security.

During the 1st quarter of 2019, the Melange confectionery earned 650 thousand rubles. In addition to the business owner, the company employs 2 bakers and a salesperson, and the accounting is handled by a freelance accountant. The accounting policy states that the purchase of raw materials and inventories, as well as employee salaries, are included in the cost price.

During this period, the owner decided to sell 1 of the 2 dough mixers due to insufficient workload of two machines. The sale of the dough mixer brought in 300 thousand rubles, but this amount is not included in the calculation of gross profit, since such a transaction does not relate to the main activity of the company.

Let's find the cost of production: 175 + 15 + 110 + 24 + 60 + 25 = 409 thousand rubles.

The gross profit of the Melange company for the 1st quarter was: 650 – 409 = 241 thousand rubles.

Profit from sales of products in production is the same as profit received from sales in a trading enterprise or in the provision of services.

This is a more in-depth indicator than book profit; it allows company management to assess how efficient the production or sale of products is, taking into account commercial and administrative costs. The amount of profit from sales affects the enterprise, that is, the ability to cover current and pay off unforeseen expenses that may arise at any time.

It is found using the following formula:

• Profit from sales (sales) = Gross profit - administrative and selling expenses

Selling and administrative expenses are included in general expenses related to the normal activities of the company. Some of them are included in the cost of goods produced or sold.

In fact, tax legislation and other government regulations do not provide a specific concept of such expenses. There is a generally accepted norm, and each enterprise, in its accounting policy, at its own discretion, assigns part of the costs to managerial or commercial expense items, then they are reflected in the necessary accounting accounts.

Administrative expenses usually include those costs of an enterprise that do not directly relate to the production or sale of goods or the provision of services.

This includes:

Selling expenses include those that are included in the cost of production and are directly related to the main activities of the company, for example:

Continuing our example, we will determine the profit from the sale of the Melange confectionery for the 1st quarter of 2019. To do this, from the gross profit obtained, we subtract commercial (costs of delivery of raw materials, packaging and advertising) and administrative costs.

241 – (8 + 12 + 25 + 15) = 241 – 60 = 181 thousand rubles – was the profit from sales.

Profit before tax

This is the amount that is the basis, or basis, on which income tax is calculated. It represents an interim financial result when all receipts and all expenditures of the enterprise's funds are taken into account before paying taxes. It is found like this:

• Profit before tax = Revenue + Other income – Cost of sales – Selling expenses – Administrative expenses – Other expenses

In the accounting standards specially developed by the Ministry of Finance and the Central Bank of the Russian Federation, namely in the “Regulations on accounting» 9/99 No. 32n and 10/99 No. 33n other income and expenses include funds received or withdrawn from:

• provision of company assets for temporary disposal;
• paid transfer of intellectual property rights;
• sale or write-off of fixed assets, non-financial assets (except goods);
• interest on loans;
• accrual of penalties and interest for failure to fulfill contractual obligations;
• charity;
• another activity different from the main one.

In our example, for the 1st quarter of 2019, the confectionery shop received other income from the sale of a dough mixer in the amount of 500 thousand rubles. The company had no other miscellaneous expenses during this period.

Profit before tax will be equal to: 650,000 + 300,000 – 175 – 15 – 110 – 24 – 60 – 25 – 8 – 12 – 25 – 15 = 481 thousand rubles - this amount serves as the tax base for paying income tax.

Net profit

This is free cash remaining at the disposal of the company after all taxes and deductions. When calculating net profit, the accountant summarizes the activities for the reporting period. The result obtained is assessed by management and the owner of the business for the further use of the received profit for the development and expansion of production, procurement modern technology and equipment, introduction of new technologies. Investors evaluate their prospects for investing in a company based on net profit. If the company is solvent, banks agree to issue loans. A company's good net profit attracts business partners to mutually beneficial cooperation.

How to calculate net profit? It is found from the total amount of income of the enterprise for a specific period, taking into account all expenses incurred. At this stage, extraordinary income or expenses are added to the previously discussed inflows and outflows of funds. These are the consequences of force majeure situations (fires, floods, man-made disasters, terrorist attacks), due to which the company incurs losses or receives insurance compensation.

The net profit formula is:

• Net income = Profit before tax + extraordinary income – extraordinary expenses – income tax

In 2020, legal entities pay tax at the basic rate of 20% (except for preferential categories), of which 3% goes to the federal budget, and 17% to the regional budget at the location of the taxpayer-legal entity. Thus, the Melange confectionery is obliged to pay to the budget: 481,000 * 20% = 96,200 rubles.

The calculation of the net profit of the Melange company is as follows: 481,000 – 96,200 = 384,800 rubles.

Balance sheet profit

Balance sheet profit is reflected in the main documents of the organization’s financial statements - Form No. 1 “Balance Sheet” and Form No. 2 “Report on financial results" It is determined incrementally over 1 quarter, half a year, 9 months, and a year. This parameter is assessed dynamically, that is, for different periods of time, for example, the indicators of the previous and current year. At the same time, various balance sheet items are analyzed and factors that influenced the decrease in profit are tracked. If the profit plan is not met, the business owner can assess the reasons for this and take measures to improve the financial and economic situation.

Balance sheet profit is found by the formula:

• Balance sheet profit = Income from core activities + Other income – Expenses from core activities – Other expenses

Many small businesses use simplified reporting and are not required to draw up Form No. 1, therefore they do not use the concept of balance sheet profit.

In our example, the book profit of the Melange confectionery will coincide with the profit before taxes and amount to 481 thousand rubles.

Operating profit

This indicator is used by companies in Europe and America, and is less common in Russian accounting practice.

In the English version, operating profit is called EBIT - Earnings Before Interest and Taxes - literally: profit before taxes and interest on borrowed funds. Find it like this:

• Operating profit (EBIT) = Gross profit – Selling expenses – Administrative expenses – Other expenses + Other income + Interest payable

In other words:

• Operating profit = Balance sheet profit + Interest payable

It makes sense to calculate this indicator if the interest on loan obligations is high. If there are none or the percentage of loan payments is insignificant, operating profit will be equal to book profit or profit before tax. That is, the dependence of the enterprise on creditors is reflected. Operating profit is primarily of interest to investors and other stakeholders as an opportunity to evaluate financial condition and company value.

Marginal profit

There is also such a thing as marginal profit. It is equivalent to gross or book profit, but there are differences in economic significance these quantities.

Marginal profit is found as the difference between the company's revenue from its core activities and part of the expenses called variables. These include expenses that directly depend on the volume of products produced and in Russian accounting are not allocated to a separate category, but are included in the cost price.

• Marginal profit = Revenue from core activities – Variable costs(Cost price)

Marginal profit is good because it helps to calculate profit not only in relation to the total volume of goods produced, but also in the context of a separate type of goods or per unit of production.

• Marginal profit per unit of production = Selling price of a product (one product type) – Cost of a unit of product (one product type)

For example, the Melange confectionery produces cakes and you need to find out which one is the most cost-effective.

The smallest marginal profit comes from the Brownie cake; knowledge of this allows the owner of a confectionery shop to plan production in a new way. You can remove this item from production or increase the final price for it.

Marginal profit is of interest to investors when planning new projects and investments in investment areas.

Factors affecting profit

Any enterprise constantly interacts with various phenomena that can positively or negatively affect the company’s performance – profit. This influence can be external, independent of the enterprise itself, and internal, when a change in the situation within the company can increase or, conversely, reduce business efficiency.

What external factors can influence profit?

Let's list the main external factors:

• Inflation.

In conditions of economic instability, high growth rates do not allow the enterprise to develop; priorities are aimed only at “staying afloat.” Inflation “eats up” all savings; the entrepreneur has no opportunity for capital investments in production.

• Increasing tax rates, changing preferential tax policies.

In 2018, the (single tax on imputed income) was increased by 3.9%, which is actively used by small businesses. At the same time, tax breaks on movable property of legal entities were canceled at the regional level. It is clear that such changes can have a negative impact on profitability, especially for small businesses.

• Adoption of legislative acts related to business issues at the state level.

For example, a law obliging all (with some exceptions) entrepreneurs to use online cash registers from July 2018. This ensures transparency of payments and ensures immediate receipt of information to the tax office. On the other hand, many representatives of small businesses, especially in the regions and on the periphery of the Russian Federation, are unable to financially support the implementation and maintenance of new technologies, so the small profits of such companies can go into the negative.

• Changes in the cost of raw materials and supplies.

Obviously, the increase in cost production resources affects the increase in cost, and entails an increase in the price of the final product. This, in turn, reduces sales, meaning it will negatively impact the company's profit margin. Conversely, concluding an agreement for the supply of affordable raw materials (while maintaining the quality of resources) will allow expanding production volumes or changing pricing policy companies. Such measures can attract customers and increase profits.

• Market situation.

Profit is influenced by the number of producers and consumers in the market, the possibility of entering the market, whether it is high or low in the industry.

This is where creating a unique experience can help. trade offer. The buyer needs to be offered a new interesting product that will be in demand. For example, the Melange confectionery bakes personalized children's cakes. This idea attracted many mothers to order such cakes for their child’s birthday from this confectionery shop.

No less than external factors, the size of profit is also influenced by the situation developing within the enterprise. The following internal factors exist:

• Company turnover.

An increase in the quantity of products produced at a constant cost can lead to an increase in profits. But first you need to predict the demand for the product, or find additional sales channels.

• Expansion of the product range.

A wide range of products gives the buyer choice. If you rely on quality and prestige individual species product, you can attract high-income buyers.

• High level professionalism and quality of service

This factor is very important. Personal qualities of service personnel in trading company or managers manufacturing enterprises influence the attraction of clients or their departure due to the inept work of the company’s employees.

• Technical equipment

Modern equipment helps save time and speeds up the production process, which has a positive effect on the company’s turnover.

• Business reputation of the company.

If a company has made a “name” for itself, the owner values business reputation, business partners will be interested in cooperation with this company. When a company has established itself with the best side, customers become regulars and bring relatives and friends. This is how demand for products and profits grow.

External and internal factors influencing profit need to be analyzed at all stages of the company’s activities.

Why do you need to calculate and evaluate company profits?

Various situations may arise when it is necessary to estimate profit:

1 To find out to what extent the company has fulfilled its profit plan, and whether reality meets expectations. At the beginning of work or when launching a project, a business plan is drawn up, in which a development forecast is made, costs and profits are calculated, and the timing of the work is assumed. The business plan tries to take into account all possible factors influencing the development of the enterprise.

Having calculated the real profit, after all the necessary deductions and payments, that is, the net profit, it is compared with the planned one and conclusions are drawn. If the profit is less than initially expected, the manager or business owner can understand what was done wrong and what decisions were wrong.

2 Determine reserves for further profit growth. If during the calculation it becomes clear that the cost of production is high, then you need to look for new suppliers of raw materials. Reducing costs while maintaining a constant price will lead to increased profits. Development of marketing activities: advertising and promotions, product presentations will attract the attention of buyers to the company and products. Sometimes new packaging helps increase interest in a product.

3 Adjust the company’s development strategy (develop successful areas). Calculating and assessing profit indicators will help you decide in which direction to move next in order to increase the profitability of the company. For example, if it is revealed that one of the types of products brings little or no profit, this is a reason for management to think about whether this product needs to be produced, whether it would be better to remove it from production, and use the freed up resources to produce products that are more profitable and in demand among customers.

Profit and taxation

Any company operating in Russia is required to pay income tax. This is stated in Chapter 25 of the Tax Code of the Russian Federation.

The object for paying tax is the profit received for a specific period as the difference between income and expenses.

The following income is taken into account:

• from product sales own production;
• from resale of purchased goods;
• from the sale of property and securities;
• costs not related to sales (non-operating). They are spelled out in Article 250 of the Tax Code of the Russian Federation and include, for example, income from leasing property, property or work (services) received free of charge, exchange rate differences, and income from previous years.

Expenses accepted for tax purposes include the following:

• for raw materials and supplies;
• employee salaries;
• depreciation deductions;
• other expenses;
• non-operating costs, for example: costs of issuing securities, legal costs.

If the company received a loss rather than a profit, then the tax base is considered equal to zero.

Income tax is calculated at a basic rate of 20%.

Preferential rates are set at 0% - for medical, educational and social institutions, as well as income from equity participation in other organizations, and upon receipt of dividends.

13% is paid by those Russian legal entities that received dividends (except for cases of taxation at a zero rate) and income on shares certified by depositary receipts.

The specifics of taxation at a 0% rate are disclosed in Article 284 of the Tax Code of the Russian Federation.

15% is paid by foreign companies on dividends received on shares of Russian companies, in accordance with Article 275 of the Tax Code of the Russian Federation.

Income tax is accrued for a quarter, six months, 9 months (these are reporting periods) and is calculated on an accrual basis for the year (this is a tax period).

Enterprises are required to make monthly or quarterly payments of income tax to the budget; the tax for the year is transferred until the end of the 1st quarter of the following reporting year. Simultaneously with the payment of the tax, the corresponding tax return.

Answers on questions

What is the difference between income and profit?

In a general sense, income is all the financial receipts of an enterprise from various operations, including non-productive ones. Whereas revenue is money received only from the production or sale of goods, that is, from core activities. Both revenue and income reflect the financial influences on the company, while profit is formed taking into account both the receipt of funds and their expenditure. Thus, income and revenue serve as the basis for calculating profit, this final indicator of the company's performance.

Is it possible to include training for a company employee in income tax expenses?

Article 264 of the Tax Code of the Russian Federation states that expenses include advanced training courses. In this case, an agreement is concluded with the organization implementing the training program, and a certificate is issued upon completion of the training. If these conditions are not met, then training expenses cannot be recognized for tax purposes.

The company's employees spent the weekend relaxing at a recreation center outside the city; a bus was ordered for the trip on behalf of the organization. Is it possible to include money spent on transportation as expenses?

The Tax Code of the Russian Federation clearly gives a negative answer, since such expenses are not related to official activities companies.

How to correctly classify mobile phone payments as an expense?

Payments mobile operators included in the administrative expenses of the enterprise. To prove to the tax authorities the validity of these costs, it is better to officially approve the list of employees who will use mobile communications. To confirm your use not for personal purposes, but for commercial activities, order call details from the operator.

Remember

• Profit is the main component of any business. Without it, the meaning of entrepreneurship is lost, if you do not take into account the first steps of commercial activity. A negative result is possible at the very beginning of the project; in the future, this is an indicator of the adoption of incorrect management decisions, the inappropriateness of spending material resources and financial assets of the company.
• Every owner strives to achieve economic solvency and freedom to dispose of profits. But to do this, you first need to get it, and then learn to count.
• The calculation of business profitability indicators is based on revenue, that is, those incomes received from the sale or production of products, as well as associated costs. These expenses must be directly related to the activities of the company, be justified and documented.
• There can be a great variety of both income and expenses in a company. Based on these differences, gross, balance sheet, accounting, economic, operating, net and other types of profit are determined.
• Each of them can be used by the head of the enterprise, its owners and investors, and shareholders of the company. Inspectors and regulatory authorities, contractors and partners of the company can understand how effective the business is, how to build a strategy for further development, whether the dividends will be high, whether the reporting is transparent and whether it is worth maintaining partnerships with this company.
• Every entrepreneur is required to make income tax payments to the budget on time. This is usually 20%, but reduced rates apply.
• The formation of profitability is influenced by various factors, both internal and external. Instability of the political or economic situation, high inflation, the introduction of legislative initiatives that limit or support business development, competition, technological innovations - this is not a complete list of factors affecting the company’s activities. Correctly using changes and fluctuations in internal and external environment, the owner or manager of a business can achieve maximum profits.

The main goal of the financial and economic activities of each commercial organization is to make a profit, which is one of the key indicators of such activities (Article 50 of the Civil Code of the Russian Federation). Also, one of the main indicators of a company’s performance is its revenue. What is the difference between revenue and profit, we will consider in this consultation.

Revenue, profit and income: what's the difference

In order to answer the questions of how income differs from revenue and profit, and also how revenue differs from profit, we will understand how revenue and profit are formed.

The company's income is recognized as receipts of cash, other property and proceeds from the repayment of obligations, which lead to an increase in the capital of this organization, with the exception of deposits of its participants (clause 2 of PBU 9/99).

The organization's income is divided into income from ordinary activities and other income (clause 4 of PBU 9/99).

The company's income for ordinary activities is revenue from the sale of goods, receipts as a result of the performance of work or the provision of services (clause 5 of PBU 9/99).

Revenue consists of the amount of cash received, other property calculated in monetary terms, and the amount of receivables (in the part not covered by receipts) from the company’s main activity, with the exception of the following receipts (clause 3, clause 6 of PBU 9 /99 ):

• amounts of VAT, excise taxes, export duties and other similar mandatory payments;
• amounts under agency agreements, commission agreements and other similar agreements in favor of the principal, principal, etc.;
• amounts received as prepayment for goods, works, services;
• amounts of advances for payment of goods, works, services;
• deposit;
• amounts received as collateral if the agreement provides for the transfer of the pledged property to the pledgee;
• amounts received as repayment of a loan provided to the borrower.

In addition to income in the form of proceeds from the sale of goods, performance of work and provision of services in the main type of activity, the organization’s income also includes other income from other types of activities (investment, financial), with the exception of income specified in clause 3 of PBU 9/99 (clause 4 PBU 9/99).

In particular, other income includes income from the provision of one’s property for temporary use for a fee; proceeds from participation in the authorized capital of another organization; interest on loans and borrowings provided; fines and penalties for violation of the terms of contracts (clause 7 of PBU 9/99).

That is, income is not revenue or profit. These are all proceeds that lead to an increase in the company's capital.

The company's profit is defined as the positive difference between the income received (which includes revenue from the sale of goods and services, income from the rental of property, interest income, fines received, etc.) and the expenses incurred to obtain this income.

What is the difference between revenue and profit (in simple words)

So, income is revenue from the sale of goods, performance of work, provision of services, as well as other non-sales income (clause 4, clause 5 of PBU 9/99, clause 1 of Article 248 of the Tax Code of the Russian Federation, clause 1 of Article 249 of the Tax Code RF).

The difference between revenue and profit is as follows.

Revenue is the volume of sales, the amount of money received from the sale of manufactured or previously purchased products, services provided, work performed (Article 249 of the Tax Code of the Russian Federation).

Profit is the part of income (including revenue from sales of goods, works, services) remaining after reimbursement of costs aimed at obtaining it (Article 247 of the Tax Code of the Russian Federation).

Unlike profit, revenue cannot be negative or null value.

Let's explain with an example. The organization sold goods worth 100,000 rubles in a month. This is the organization's income. The cost of purchasing these goods amounted to 50,000 rubles. Other expenses of the organization per month - 20,000 rubles. Then the organization’s profit for the month will be:

100,000 rub. - 50,000 rub. - 20,000 rub. = 30,000 rub.

Revenue is a key concept in business. This is an indicator of the activity of any enterprise. To determine it, a number of calculations are required. Many people confuse revenue with profit. However, these are different concepts.

The concept of revenue in simple words

Revenue– this is income from the company’s activities, the total amount of funds received for the performance of services or the sale of goods. Calculated over a specified period of time. Previously, revenue was considered a type of profit. However, this issue is now disputed by many experts.

IMPORTANT! The company's activities depend on the size of its revenue. It is the receipt of funds that is the result of the enterprise’s activities. If these funds are very small, the organization is considered unprofitable.

Why do you need revenue calculation?

This indicator is the most important concept in the company’s activities. Its calculation is carried out for the following purposes:

• Analysis of demand for services provided and goods sold. Based on the results of the analysis, the entrepreneur can draw up a strategic production plan and determine a purchasing plan.
• Based on the amount of revenue, you can get an idea of ​​the economic success of the company.
• This is a key indicator of the company's performance. If there is no revenue, this is a sure signal that changes need to be made.
• Based on the revenue, the cost of the products sold is adjusted, and the circulation for which there will definitely be demand is determined.

The amount of revenue needs to be known, first of all, to the head of the company. But this information may be requested by business partners, creditors, and investors.

Revenue functions

The main function of revenue is to compensate for expenses, funds that were spent on the purchase of goods or their production. Financial resources received from the activities of the enterprise are transferred to accounts. Timely translations are ensured by:

• stability of the company's activities;
• continuity of turnover of goods.

Typically, proceeds are spent on the following purposes:

• payment for services of suppliers;
• acquisition of products or materials for their production;
• payment of salaries to employees;
• payment of taxes;
• expansion of the enterprise.

That is, funds are usually invested in developing the business and maintaining its viability.

Delayed revenue receipts lead to negative effects:

• enterprise losses;
• decrease in profit indicators;
• payment of fines accrued for failure to meet deadlines for loan payments;
• violation of contractual obligations to business partners;
• inability to pay all bills.

The head of the organization must ensure uninterrupted receipt of revenue. Without regular and timely receipt of funds, a business cannot exist.

What may be included in revenue?

The indicator under consideration includes:

• the purchase price at which the products were purchased;
• added value that appeared during the sale of goods.

That is, revenue takes into account the full price of products sold.

Sources of revenue are:

• The main activity of the enterprise (for example, the sale of goods and the provision of services).
• Investments (working with securities, selling shares).
• Other financial activities(for example, receiving funds from a company in which the enterprise’s investments were previously directed).

The list of sources depends on the specific company and its type of activity.

Calculation example

The store sells washing machines for 5,000 rubles. 100 were sold in a month washing machines. Price household appliances multiplied by the number of units sold. That is, the store’s revenue will be 500,000 rubles per month.

The amount of revenue must be indicated in accounting. This indicator is recorded in stanza 2110 “Revenue”.

IMPORTANT! Revenue is subject to tax, and therefore tax deductions must be subtracted from this value.

How is revenue different from profit?

Revenue represents the totality of funds received from activities. This value does not take into account the company's expenses. Profit is the difference between revenue and expenses. Expenses are understood as the costs of supporting the activities of the enterprise. Let's look at all the differences:

• Calculus. The amount of revenue can be zero or positive. Profit can take negative values.
• Compound. To obtain information about revenue, it is enough to know all the income of the enterprise from its activities. To calculate profit, you need to know not only the amount of income, but also the amount of expenses.
• Real expression. Revenue may be potential. For example, the company provides customers with the opportunity to arrange an installment plan. There may not be funds in the company’s account, but there is a guarantee that they will appear. Profit cannot be “virtual”. It is calculated based on actual values.
• Expression. Revenue is a definition that can be interpreted in a single meaning. Profit can be divided into two forms: gross and net. Net profit refers to the amount of income received after paying all taxes.

Profit and revenue differ significantly from each other in a key number of ways.

Example

The company sells phones for 1,000 rubles. We manage to sell 500 phones a month. Revenue is 500,000 rubles. The same company spends certain funds on its activities. They go to pay rent for the premises. Rental payments per month amount to 50,000 rubles. The company also has to pay salaries to its employees. In total, wage will be 100,000 rubles.

First, you need to add up all the expenses. They will amount to 150,000 rubles. All expenses are deducted from revenue. The profit will be 350,000 rubles.

Can revenue be negative?

Revenue can be either zero or positive. If all of the enterprise's income is missing, the value will be zero. This indicates that the company is not engaged in any activity. Related this feature with the fact that nothing is deducted from the proceeds. If it is completely absent, then the company does not receive any funds at all.

FOR YOUR INFORMATION! But the profit can be negative. For example, a company sold goods worth 10,000 rubles, and the cost of renting an office is 20,000 rubles. In this case, the organization will lose 10,000 rubles.

Revenue – important concept when doing business. Allows you to determine all the income of the enterprise. Gives an idea of ​​the demand for products or services, job stability. Based on it, prices for goods are set and their circulation is determined. It differs from profit in that nothing is subtracted from the indicator under consideration. Typically, funds from the proceeds go to the needs of the business and to ensure its smooth operation.

Why do giant corporations with billions of dollars in trade and revenue suffer losses? And how small firms show very high profits, having a maximum of several hundred employees? Economic terms strongly overlap with each other, and juggling concepts can be used for manipulation. It is especially important to separate categories such as “profit” and “revenue”. Despite their apparent synonymy, they mean completely different concepts.

Revenue– these are all funds received by an individual or legal entity for goods or services, excluding the costs of their acquisition. Thus, the revenue will include all material benefits received from trade, production, and consulting services. Exist various ways calculation of this value. Revenue can be cash (at the time of receipt of funds) or accrued (at the time of transfer of goods, regardless of the time of payment for it).

Profit– this is the difference between the company’s revenue and the costs of obtaining it. This value can be either positive or negative. Profit is expressed in cash and in kind and corresponds to the balance of funds after deducting all costs associated with conducting business activities.

Thus, if there are no production costs, then profit will be equal to revenue, but in practice this rarely happens. In other cases, the concepts will be different, reflecting different aspects of the enterprise's activities. So, revenue is always either positive or zero. Profit can be either positive or negative, which is due to the peculiarities of doing business.

Revenue can be calculated based on the volume of products shipped. After all, today factoring, leasing schemes and deferred payment have been established. Profit is calculated only upon receipt of money. Revenue can be calculated by adding up all receipts of funds to the company’s account. To establish the amount of profit, you need to subtract from income all financial costs associated with conducting business activities.

Regardless of the calculation approach (real or nominal), revenue remains constant. As for profit, it can be total (the difference between income and expenses) and net (that which remains after paying taxes and fees). Understating real profits is one of the ways to reduce the tax burden on an enterprise. Inflating revenue, on the contrary, is a means to improve the image and create greater financial “weight” of the company.

Conclusions website

1. Calculus. Revenue is always greater than zero; if it is lower, then they speak of its complete absence. As for profit, this value can be either positive or negative.
2. Compound. To calculate revenue, you need to calculate the sum of all funds received by an individual or legal entity over a certain period of time. Calculating profits is more difficult: first you need to know the amount of all income and expenses.
3. Real expression. Revenue can be “virtual”, for example, if the company works with deferred payment, giving its customers the opportunity to pay money later. Profit can only be expressed upon completion of all payments, when funds are either received in person or transferred to a bank account.
4. Expression. Revenue is a single-digit value, since it consists of all receipts. Profit can be gross (total) and net (remaining after paying all fees to the state).

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